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Gant Company purchased 30 percent of the outstanding shares of Temp Company for $83,000 on January 1, 20X6. The following results are reported for Temp Company: Net income Dividends paid Fair value of shares held by Gant: January 1 December 31 20x6 20X7 S 47,000 11,000 1. Carries the investment at fair value. 2. Uses the equity method. 83,000 102,000 20x8 $ 42,000 $ 56,000 26,000 16,000 102,000 99,000 99,000 110,000 Required: Determine the amounts reported by Gant as income from its investment in Temp for each year and the balance in Gant's investment in Temp at the end of each year assuming that Gant uses the following options in accounting for its investment in Temp:

Gant Company purchased 30 percent of the outstanding shares of Temp Company for $83,000 on January 1, 20X6. The following results are reported for Temp Company: Net income Dividends paid Fair value of shares held by Gant: January 1 December 31 20x6 20X7 S 47,000 11,000 1. Carries the investment at fair value. 2. Uses the equity method. 83,000 102,000 20x8 $ 42,000 $ 56,000 26,000 16,000 102,000 99,000 99,000 110,000 Required: Determine the amounts reported by Gant as income from its investment in Temp for each year and the balance in Gant's investment in Temp at the end of each year assuming that Gant uses the following options in accounting for its investment in Temp:

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 23E
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Gant Company purchased 30 percent of the outstanding shares of Temp Company for $83,000 on January 1, 20X6. The following results are reported for Temp Company: Net income Dividends paid Fair value of shares held by Gant: January 1 December 31 20X6 20X7 $ 47,000 1. Carries the investment at fair value. 2. Uses the equity method. 11,000 83,000 102,000 20X8 $ 42,000 26,000 102,000 99,000 $ 56,000 16,000 99,000 110,000 Required: Determine the amounts reported by Gant as income from its investment in Temp for each year and the balance in Gant's investment in Temp at the end of each year assuming that Gant uses the following options in accounting for its investment in Temp:
Transcribed Image Text:Gant Company purchased 30 percent of the outstanding shares of Temp Company for $83,000 on January 1, 20X6. The following results are reported for Temp Company: Net income Dividends paid Fair value of shares held by Gant: January 1 December 31 20X6 20X7 $ 47,000 1. Carries the investment at fair value. 2. Uses the equity method. 11,000 83,000 102,000 20X8 $ 42,000 26,000 102,000 99,000 $ 56,000 16,000 99,000 110,000 Required: Determine the amounts reported by Gant as income from its investment in Temp for each year and the balance in Gant's investment in Temp at the end of each year assuming that Gant uses the following options in accounting for its investment in Temp:
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